THE ADVANTAGES OF LUXURY RENTALS ON CENTRAL PARK
To rent, or to buy? This is the essential question for anyone seeking a luxury home in New York City. At first, the notion of owning a home on Fifth Avenue along Central Park is seemingly preferable to renting one – as the New York Times states, “direct Central Park views may be the most valuable amenity in Manhattan real estate.” Moreover, the concept of ownership has historically been imbued with an air of security – financially, and spiritually. However, recent trends in the housing market, in conjunction with the particulars of ultraluxury real estate, warrant a closer look at these historic assumptions – a look that points to renting a Fifth Avenue luxury residence instead of buying one.
Timing Is Everything
It is no secret that New York City home values have risen steadily over the past decade. According to 6qsft, in 2018, the average sales price for condos in Manhattan was $2.88 million – 30% higher than in 2008. However, this is down slightly from 2017’s average of $3.05 million. It is quite possible that Manhattan home values may decrease more in the coming years, especially at the high end of the market, where new ultraluxury residences are coming to market at a steady pace despite last year’s decrease in average sales prices.
As such, purchasing a prestigious Central Park apartment right now could mean paying a premium, while a little patience could reveal opportunities to make sounder investments in the not-too-distant future. This is where renting becomes appealing to the savvy investor. The rental market has proven incredibly friendly to renters of late – in 2018, the average rent for luxury apartments remained steady with 2017, according to MNS’s market report. And thus far in 2019, the luxury rental scene is proving increasingly attractive – a recent Bloomberg article cited a 16% increase in new leases costing at least $10,000 per month in April of 2019, compared to a year earlier.
Rather than jumping to purchase an asset that may not hold its value over the next five years, one could rent a luxury residence at 800 Fifth Avenue or 985 Fifth Avenue, and enjoy the exclusive lifestyle afforded by a Museum Mile address, without assuming any of the financial risks of purchasing at or near the peak of a seller’s market.
And finally, New Yorkers increasingly prefer renting not just for the lifestyle flexibility it offers, but also because of recent changes to the city’s tax code. Today, mortgage payments and local taxes are only deductible up to $10,000. For those with high income, this is less than ideal, and some financial advisers suggest that renting is the wiser choice. As CNBC says, “renting and reinvesting the savings from renting, on average, will outperform owning and building home equity, in terms of wealth creation, according to new research from Florida Atlantic University and Florida International University faculty.”
Flexibility & Mobility
While some aspects of New York never change – Central Park will always remain the most desirable front yard in the world, for example – that doesn’t mean that the circumstances in one’s life are permanent. For those of us who may not be in Manhattan long-term, renting allows for a unique peace of mind – one cannot put a price on the freedom to make lifestyle decisions without worrying about finding a buyer for a recently-purchased luxury apartment, or renting it out to someone. By renting a home on Fifth Avenue, one needn’t be bound to such considerations, and can live as they please. Those who are living in New York and are fortunate enough to have their accommodations taken care of by their employer
Furthermore, the purchasing process itself is never as easy as advertised. It can take many months, if not years, to identify and buy a home on Central Park. However, life is short – and there is no reason to wait to enjoy a rarefied residential experience when one need only to contact Urbana’s leasing agents. So, why not move into the perfect luxury Fifth Avenue residence right now, and see if the right buying opportunity arises in the meantime?
While home ownership remains a highly-romanticized aspect of our society, luxury real estate in New York City is in a league of its own. And today, the pendulum has swung away from purchasing in favor of renting – due to the considerations above. To find your perfect rental home along Central Park on Fifth Avenue, explore Urbana’s availabilities today.